Critical Factors to Attract Hotel Investments
The COVID-19 pandemic devastated the Travel & Tourism sector, leading to a GDP loss of nearly USD 4.9 trillion and 62 million job losses in 2020.
Meanwhile, capital investment in Travel & Tourism also fell substantially from USD 1.07 trillion in 2019 to USD 805 billion, representing a 24.6% drop. 2021 saw a further 6.9% decline in the sector’s investment to reach USD 750 billion.
Investment in hotels represents a key component of overall investment and the development of the broader Travel & Tourism sector. As the sector begins to recover, it will be essential to attract sufficient capital investment to enable its full growth potential.
While the World Travel & Tourism Council’s (WTTC) projections point to strong growth in Travel & Tourism investment over the next decade – with an expected global average annual growth of 6.9% — governments can support this by creating an enabling environment that will attract more investment into Travel & Tourism related assets including hotels.
Governments will be competing with those of other countries to attract some of these investors, and therefore those with the most attractive policies will be more successful.
In addition to clear, open, and consistent government action and support – which has proven to be paramount during the pandemic – a well-established rule of law, political stability, favorable tax incentives, the free movement of currency, sufficient liquidity and access to capital markets remain prerequisites to attract hotel investments.
Safety & security with regards to issues such as crime and the threat of terror attacks and natural disasters are also important considerations for investors.
As we build back better, sustainability and inclusion must be at the heart of a more resilient and competitive Travel & Tourism sector. As such, future investment needs to benefit destinations not only economically but also socially and environmentally.
Destinations with a clear commitment and plan to reach net-zero emissions and those which take a holistic approach to destination planning by integrating socio-economic and environmental elements will be ahead of the game in attracting investment.
The World Travel & Tourism Council (WTTC) today publishes ‘Critical Factors to Attract Hotel Investment’, a new report highlighting the importance of attracting capital investment to enable the Travel & Tourism sector’s full growth potential post-COVID-19, following a 25% drop in 2020.
The report was introduced during the ongoing Sustainability and Investment Summit in San Juan, Puerto Rico
The report looks at key enabling factors for hotel investment, and success stories of destinations that have employed such factors and shown strong growth in investment.
Download a PDF version of the WTTC report click here.
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